Point of sale ("POS") transactions result in billions of dollars in sales of goods and services each year. The best example of the recent proliferation of consumer POS systems is the automatic debit machines in use, for example, at most large supermarkets. Using these machines, a consumer can credit the sales amount to the supermarket by directly accessing his or her bank account. Numerous systems for validating and effecting credit card transactions have also been available for years. These systems require communication between the POS terminal and some destination host which is in possession of the necessary credit information.
When conventional networks are used for a POS transaction, the steps performed in effecting the transaction are as follows. First, the originating POS terminal dials a port on a public telephone network ("PTN"), thus accessing the originating node in a packet switched network ("PSN"). The originating POS terminal then provides a mnemonic destination network address to the originating node. The originating node then converts the mnemonic address to a network called address and sends a Call Request packet to the PSN controller. The Call Request packet contains the network called address of the destination node and host. The PSN controller then sends the Call Request packet to the destination host.
If the Call Request packet is valid, the destination host replies with a Call Accepted packet. The Call Accepted packet is sent to the originating node. This is converted to a connected message and sent to the POS terminal. When the POS terminal receives the message, it sends transaction data to the originating node which compiles it into a Data packet which it sends to the destination host. The destination host processes the Data packet, assembles its own Data packet based on the information in the received Data packet and in its own database, and sends this Data packet to the originating node which sends the information portion to the POS terminal. The POS terminal, on reception of the information, disconnects from the PTN and the PSN sends a Clear Request to the destination host. A Clear Accepted message is then sent from the destination host to the originating node, and the transaction is complete.
This procedure involves many messages sent on both the PTN and the PSN. Eliminating dependence on the PTN would speed up the process and cut down on transaction costs. Delaying the Call Request until the POS has supplied the originating node with all the transaction data would reduce the duration of PSN use.
Several known systems communicate over networks other than a PTN. For example, U.S. Pat. No. 5,228,053 to Miller et al. discloses a spread spectrum cellular overlay code division multiple access ("CDMA") communications system. This system uses microwave energy to communicate between personal communications units linked in a personal communications network ("PCN"), although operational details of the microwave network are not disclosed. The system is directed toward use with cellular mobile communications subscribers. The use of a PCN in such a system would probable be impractical in a POS system intended for widespread use.
U.S. Pat. No. 5,144,649 to Zicker et al. discloses a cellular radiotelephone credit card paystation method. This method allows for communication among multiple cellular credit card paystations and a central credit card host and a remote programming host. All these components operate within an RF system and encompass a proprietary paystation and protocol. Local verification of a user's credit card enables the user to communicate using a cellular telephone. A fraud alert threshold is reached when the telephone usage exceeds a preset amount of time. The user's credit card is then remotely validated to allow further communication from the paystation. The paystation cannot, however, be used to effect a consumer transaction, and therefore cannot be used as a point of sale terminal.
U.S. Pat. No. 4,829,569 to Seth-Smith et al. discloses the communication of individual messages to subscribers in a subscription television system. This involves the selective and secure transmission of messages to individual subscribers within a broadcast system. Some of the information is transmitted in addressed packets. The system processing billing information, but this information is only pertinent to the use of the system itself. It is not used as a point of sale system, nor is this use suggested.
U.S. Pat. No. 4,763,191 to Gordon et al. discloses dial-up telephone network equipment for requesting an identified selection. This invention is a means for providing the calling party phone number to dialed party equipment so that the dialed party can correctly respond to and account for requests from the calling party. In particular, dial-a-view requests are conveyed and authorized then sent from the caller's phone to the caller's addressable television decoder. Gordon et al. use the calling party's number for routing efficiency but do not address call duration. The Gordon et al. invention uses a centralized network, but does not bypass normal the telephone network.
U.S. Pat. No. 3,798,602 to Hynes, Jr. discloses a credit authorization system. The system provides credit card verification, usage information, and user identification to a central processor which in turn can reply with access control. Hynes, Jr. does not disclose communication between a central node and an authentication host. The central processor of the Hynes, Jr. system must therefore have all access control information.
U.S. Pat. No. 3,624,608 to Altman et al. discloses a system for the rental of cars by credit card. Credit card data are read at the car and are transmitted via RF to a central location for determination of authorization. The system uses the PTN to verify credit with another credit authority.
None of the above systems is a POS system that completely eliminates use of the PTN. Further, none of the systems assembles all transaction data prior to connection with a PSN in order to curtail PSN use. A system which could accomplish both of these would cut down considerably on transaction costs.